H & T Fair Hills, Ltd. v. Alliance Pipeline L.P.

Background

Alliance obtained pipeline easements on agricultural property in North Dakota, Minnesota, Iowa, and Illinois. The plaintiffs claimed Alliance failed to compensate them for losses associated with the pipeline and brought this class action. The court certified a class consisting of persons or entities who held or hold a land interest on Alliance’s pipeline right of way and, since 2014, were or are eligible for crop-loss compensation under easements or agricultural impact mitigation agreements.

Some class members’ easements contained arbitration agreements. Alliance moved to compel arbitration and to dismiss the arbitrable claims. The district court granted that motion in part and denied it in part. It stayed only certain crop-damage issues for class members subject to arbitration agreements, while allowing other issues to proceed.

Earlier appellate proceedings

Alliance appealed. The Eighth Circuit affirmed in part and reversed in part. It agreed that the damages issues were subject to arbitration for plaintiffs whose easements contained arbitration provisions and concluded that the additional crop-damage issues the district court had left in litigation were also subject to arbitration. The Eighth Circuit directed the district court to dismiss the claims of class members subject to arbitration agreements without prejudice.

After the mandate issued, the district court dismissed those claims without prejudice. Judgment had not been entered.

Motion for reconsideration

The plaintiffs moved for reconsideration after the Supreme Court decided Smith v. Spizzirri, 601 U.S. 472 (2024). In Spizzirri, the Supreme Court held that when a dispute is subject to arbitration and a party requests a stay pending arbitration, Section 3 of the Federal Arbitration Act requires the court to stay the proceeding rather than dismiss it because the claims are arbitrable.

The district court concluded that Spizzirri was an intervening change in controlling law. It rejected Alliance’s arguments that Spizzirri did not apply because the affected class members were unnamed, that it did not apply retroactively, and that the Eighth Circuit’s earlier direction controlled. The court noted that unnamed class members can be considered parties to litigation in important respects and that the case was still pending because judgment had not been entered.

Ruling

The court granted the plaintiffs’ motion for reconsideration. It vacated the earlier order insofar as that order dismissed the claims of class members subject to arbitration agreements, and it stayed those claims.

The court expressly did not decide whether there was another reason to dismiss the claims unrelated to arbitration. It also expressed no opinion on whether the class-certification order should be altered or amended.